State v. Fox

• Decision Date: 08 November 1939
• Docket Number: No. 8823.,8823.
• Citation: 133 S.W.2d 987
• Parties: STATE v. FOX et al.
• Court: Texas Court of Appeals

133 S.W.2d 987

STATE v. FOX et al.

No. 8823.

Court of Civil Appeals of Texas. Austin.

November 8, 1939.

Rehearing Denied November 29, 1939.

COPYRIGHT MATERIAL OMITTED

Appeal from District Court, Travis County; Roy C. Archer, Judge.

Action by the State of Texas against James J. Fox and another to recover an amount of money being a part of the ad valorem, poll, occupation, and automobile taxes collected by the named defendant for the months of January and February, 1932. From a judgment denying recovery, plaintiff appeals.

Affirmed.

Gerald C. Mann, Atty. Gen., and George W. Barcus, Asst. Atty. Gen., for appellant.

Geo. E. Shelley, of Austin, A. D. Dyess, of Houston, and West & Hightower, of Brownsville, for appellees.

BLAIR, Justice.

Appellant, the State of Texas, sued appellees, James J. Fox, Tax Collector of Cameron County, and the American Surety Company, as surety on his official bond, for $44,990.14, being a part of the ad valorem, poll, occupation, and automobile taxes collected by appellee Fox for the months of January and February, 1932. Appellee Fox deposited the taxes as collected in the Merchants National Bank of Brownsville, the county depository, which became insolvent before Fox's checks remitting the taxes to the State Treasurer were presented and payment refused. The total amount of the taxes collected and deposited in the depository bank for the two months was $97,181.79, but that amount was reduced by dividends of the receiver of the depository bank to $44,990.14; for which amount the State sought judgment, and from an adverse judgment denying any recovery has appealed to this court.

The State predicated its right of recovery upon its construction of Art. 7260, Vernon's Ann.Civ.St., as being mandatory and requiring that appellee Fox report and remit the taxes collected for the months of January and February, 1932, on or before February 25, 1932, and March 1, 1932, respectively; and the State also alleged that appellee Fox was negligent in not making his remittances on or before said dates. The material portions of the statute relied upon by the State read as follows:

"1. At the end of each month the Tax Collector shall, on forms to be furnished by the Comptroller, make an itemized report under oath to the Comptroller, showing each and every item of ad valorem, poll and occupation taxes collected by him during said month, accompanied by a summarized statement showing full disposition of all State taxes collected, provided that said itemized reports for the months of December and January of each year may not be made for twenty-five (25) days after the end of such months if same cannot be completed by the end of such respective months.

"2. He shall present such report, together with the tax receipt stubs to the County Clerk, who shall within two (2) days compare said report with said stubs, and if same agree in every particular as regards names, dates and amounts, he shall certify to its correctness * * *.

"3. The Tax Collector shall then immediately forward his reports so certified to the Comptroller, and shall pay over to the State Treasurer all moneys collected by him for the State during said month * * *. The Tax Collector may, in making remittance of funds to the State Treasurer or any other State officer, board, commission or employe of the State, make the same by sending cash or a check on the county depository, if the funds are in the county depository, or if the same, in due course, are required to be in such depository. * * * If such funds are sent in cash, by registered letter, by Post Office Money Order, express money order or by bank draft or bank check or depository check, in such event the liability of the persons sending the same shall not cease until the same money is actually received by the State Treasurer or the duly authorized State depository or other authorized officer in due course of business."

The report required by the statutes of the taxes collected for the months of January and February, 1932, respectively, was each dated March 16, 1932, and both were forwarded by appellee Fox to the State Comptroller and were received and filed by him on March 21st and March 22, 1932, respectively.

Appellee Fox mailed his two checks, each dated March 16, 1932, drawn on the depository bank for the full amount of the taxes due the State for January and February 1932, respectively, which checks were received by the State Treasurer, and on March 18, 1932, deposited by him in regular banking channels for collection, and were presented to the depository bank in due course for payment prior to March 24, 1932, and payment was refused, with the following notice appended to each check:

"This bank has until further notice declared a moratorium under the terms of which withdrawals of deposits are limited in amounts. This check exceeds that limit.

                            "Merchants National Bank
                            "Brownsville, Texas."
                

This moratorium was established by the resolution of the board of directors of the depository bank on March 10, 1932, and it was placed in the hands of a receiver on March 24, 1932.

The trial court, trying the case without a jury, sustained the several pleas or defenses of appellees as follows:

1. That the statute quoted was not mandatory but directory with respect to the time of making remittances of the taxes in question to the State Treasurer by appellee Fox.

2. That appellee Fox was not negligent in failing to make remittances of the taxes on February 25, 1932, and March 1, 1932: (1) Because it was physically impossible for him to have done so with the help furnished; and (2) because if he had made such remittances on February 25, 1932, or on any date thereafter the checks drawn on the depository bank would not have been paid by it because of insolvency.

3. That the sole proximate cause of the loss of the taxes by the State was the insolvency of the depository bank and/or the establishment by it of the moratorium referred to.

4. That if the checks for the remittances of the taxes had been presented and paid by the depository bank on February 25, 1932, or any date thereafter, such payment would have constituted a preference to the State in violation of the National Banking Act; because at all such times the depository was in fact insolvent.

The controlling question presented is whether the provisions of Sec. 1 of Art. 7260 are mandatory and required appellee Tax Collector to remit the taxes collected during the months of January and February, 1932, respectively, not later than February 25th and March 1, 1932, respectively. We have reached the conclusion that the trial court correctly construed the statute as being directory.

The general rule relating to the construction of statutory law prescribing the time for the performance of the duties of public officials is well stated in 46 C.J. 1037, § 306, as follows: "As a rule a statute prescribing the time within which public officers are required to perform an official act is merely directory, unless it denies the exercise of the power after such time or the nature of the act or the statutory remedy shows that the time was intended as a limitation."

Mr. Sutherland, at page 1117, § 612, of his book on Statutory Construction, also states the rule to be as follows: "Provisions regulating the duties of public officers and specifying the time for their performance are in that regard generally directory. Though a statute directs a thing to be done at a particular time, it does not necessarily follow that it may not be done afterwards. In other words, as the cases universally hold, a statute specifying a time within which a public officer is to perform an official act regarding the rights and duties of others is directory, unless the nature of the act to be performed, or the phraseology of the statute, is such that the designation of time must be considered as a limitation of the power of the officer."

Again this same author observes, in § 611, p. 1114: "Those directions which are not of the essence of the thing to be done, but which are given with a view merely to the proper, orderly and prompt conduct of the business, and by the failure to obey the rights of those interested will not be prejudiced, are not commonly to be regarded as mandatory; and if the act is performed, but not in the time or in the precise mode indicated, it will still be sufficient, if that which is done accomplishes the substantial purpose of the statute."

This language of Mr. Sutherland was quoted with approval by the Commission of Appeals in the case of Federal Crude Oil Co. v. Yount-Lee Oil Co., 122 Tex. 21, 52 S.W.2d 56, opinion expressly approved by the Supreme Court, and wherein the court held that revenue statutes are to be liberally construed to effectuate their purpose to collect money for the support of the government; that ordinarily the time prescribed in revenue statutes for the collection is not the essence of the thing sought to be accomplished; and that such statutes prescribing the time in which public officers shall perform their duties in collecting revenues are generally deemed to be directory.

To the same effect are the following cases relating to construction of statutes as being mandatory or directory: Ferris Press Brick Co. v. Hawkins, 53 Tex.Civ.App. 578, 116 S.W. 80; City of Uvalde v. Burney, Tex.Civ.App., 145 S.W. 311; Huffman v. Wilkes, 143 Kan. 458, 55 P.2d 366; Freels v. Walker, 120 Tex. 291, 26 S.W.2d 627; Bickle v. City of Panhandle, etc., 43 S.W.2d 640, 641; and Smith v. Morton Independent School Dist., 85 S.W.2d 853, 858; and Gayle v. Alexander, Tex.Civ. App., 75 S.W.2d 706, wherein the "mandatory provision" of a statute is defined as being one, the omission of which under the proceeding to which the provision relates is illegal and void; and a "directory provision" is defined as being one, the observance of which is not necessary to the validity of the proceeding; and wherein it was further held...